Sen. Franken is conducting visits during a "Rural Health Tour" in communities in the state to learn what issues the hospitals are facing.

Sen. Franken is co-chair of the Senate Rural Health Caucus.

After a brief tour of Mercy Hospital, Sen. Franken sat down with Delfs and hospital staff to discuss the issues.

Delfs spoke about the payments the hospital receives for treatment of patients covered by Medicare.

"We get back 60 percent of what it costs us to care for a Medicare patient," he said. "We spend a lot of time, and we need to be paid for what we do. How is the federal government going to pay us to keep people healthy and keep them out of the hospital?"

Sen. Franken spoke about ACOs (Accountability Care Organizations, designed to care for a large group of patients) and asked about Wilderness Health, a consortium of hospitals in the Northland that have joined together to work toward common goals.

Delfs explained Wilderness Health is an ACO, and it has set goals, however, the organization is new and few goals have been attained.

Delfs also spoke about the recent drop in revenue for Mercy Hospital.

"We went from a positive margin of 2.9 percent down to a loss of 3.9 percent," he said. "That amounted to over a million dollars on the bottom line. It was gigantic for us.

"We had to lay people off, shrink some of our services to reduce costs. We were trying to build services. We had added a few."

Dr. Dania Kamp, vice chief of staff, spoke about caring for patients in their homes.

"There have been big changes over the last 10 years," she said. "We manage patients with heart conditions and chronic diseases in their homes. We have to have a social worker visit them.

"How do we pay for that?"

Sen. Franken spoke about Minnesota being a leader in health care reform.

"Isn't that a good thing to keep people in their homes?" he asked.

Dr. Kamp agreed.

"But it is not being paid for," she said. "There are also a lot of administrative details and hassles. I am tired of having to justify that this is more important than that. I have to justify every prescription that I write. I always ask, 'Is this another thing that I have to document?'"

Sen. Franken stated the hospital is saving money, but is not getting any reward for it.

Delfs spoke about several models for hospitals, clinics and insurance companies.

In one model, where the nurses see the patients more often, the physicians keep half of what is paid by the insurance companies and the hospitals get 30 percent - upside down from the current system, he said.

"There is a lot of duplication in recording the information for the meaningful use criteria," she said. "The electronic information isn't as useful as the information entered manually.

"Also the state-required recordings to get all of the picture is burdensome."

There are problems with sharing information with other health care providers.

"We could do that but, if they can't receive the information, it doesn't work. We are moving in that direction but it is very slow and very expensive."

Sen. Franken asked about attracting medical staff to a rural area.

"It's a challenge to get someone to come to a small town," said Dr. Kelly Goeb, chair of the Mercy Hospital Board. "And it is very difficult to get specialists. They don't have the patient base."

Sen. Franken asked if medical staff would come if their student loans were forgiven.

"That's been shown to be the best way to get people to the rural area," said Dr. Kamp. "Retention is a problem. If the physicians are accepted in the community, they tend to stay longer. The new school coming to Moose Lake will help attract and retain staff."

Sen. Franken spoke about being homegrown.

"Someone from Moose Lake could come back because they have family here," he said.

"If you are raised rural, you are more likely to practice rural," Delfs concluded.